Primark home delivery is coming to Great Britain, with Associated British Foods saying the service will be offered in the future as the retailer moves to close a long-running gap in its offer. The announcement landed alongside a weak trading update, leaving customers with a new shopping option still without a launch date and investors facing another sign that the recovery is not yet in hand.
Mark Crouch on Primark
Mark Crouch said Primark’s recovery is still some way off, even after the home delivery plan was announced. He called the move in the UK the right call and said it closes a long running gap, but added: “It will not rescue this Christmas, and the market has treated it accordingly.”
3% is the expected like-for-like sales decline for the fourth quarter, after a 2.2% fall in the third quarter. Growth in the UK and Ireland was barely positive, while Sales in Continental Europe fell by more than 4%, leaving the business with uneven trading across its estate and little sign that the weaker regions have turned.
Associated British Foods on FTSE 100
Almost 10% was the drop in Associated British Foods shares, with the stock leading losses on the FTSE 100 as traders marked down the outlook. Aarin Chiekrie said: “Associated British Foods’ (ABF) fourth-quarter results have left investors hungry for more as its crown jewel, Primark, is expected to deliver a like-for-like sales decline of 3%. Growth in the UK and Ireland was barely positive, while sales in Continental Europe fell by more than 4% as consumer confidence remains particularly weak.”
Primark’s new home delivery plan gives British shoppers a way to buy from the chain without going into store, but the trading statement leaves the pace of that rollout unanswered. The market is already pricing the gap between the announcement and the sales numbers: a new channel on one side, and a retailer still struggling to turn existing stores around on the other.
